Revenue growth and a return to profitability, but progress toward the full-year operating profit target trails revenue

Q1 revenue was ¥5,841 million, up 7.9% from ¥5,413 million in the same period of the previous year. Operating profit swung to a ¥129 million profit from a ¥97 million operating loss in the same period of the previous year, while ordinary profit was ¥113 million and net income attributable to owners of the parent was ¥51 million. In addition to the improvement in revenue, the fact that all three profit levels turned positive on a consolidated basis represents a clear recovery from the same period of the previous year.

However, the full-year forecasts are ¥28,000 million for revenue, ¥1,300 million for operating profit, ¥1,300 million for ordinary profit and ¥910 million for net income, putting Q1 progress at 20.9%, 9.9%, 8.7% and 5.6%, respectively. A simple comparison based on one-quarter of the fiscal year shows that profit progress is weaker than revenue progress. Although the return to profitability has a significant impact because the company reported an operating loss in the same period of the previous year, achieving the full-year operating profit target will require the company to consistently secure profit levels above the Q1 figure of ¥129 million from the second quarter onward.

The comparable first half of FY2026 recorded revenue of ¥11,626 million, operating profit of ¥68 million, ordinary profit of ¥70 million and a net loss of ¥29 million. In the first half of FY2027, whether the company can at least exceed this revenue and operating profit will be a benchmark for determining whether the recovery goes beyond a simple rebound from the previous year's loss. Dividing the full-year plan evenly between the two halves gives reference figures of ¥14,000 million in revenue and ¥650 million in operating profit, but the company has not disclosed plans by season or by first and second half, so a mechanical assessment of achievement requires caution.

As of Q1, neither the full-year earnings forecast nor the annual dividend forecast had been revised. At the next results announcement, it will be necessary to check first-half cumulative revenue, operating profit, ordinary profit and net income, as well as progress against the full-year plan and management's view of the ¥18,000 million in revenue and ¥1,171 million in operating profit required in the second half. In particular, if revenue growth continues but the operating margin does not improve from Q1's 2.2%, the possibility remains that the operating profit target will not be met even if the revenue target is achieved.